A victory for underpaid restaurant workers has been claimed in New York City recently, with the West Village hookah bar/lounge and restaurant Veranda admitting to wage violations that will cost the owners $200,000 in total. Under the almost-year-old Wage Theft Prevention Act (WTPA) of NY $150,000 will go toward repaying employees who were compensated below the hourly minimum wage and not given overtime wages, when due. The remaining $50,000 will go toward lost wages, damages and penalties for the wrongful termination of two employees who first brought the wage violations to light. It is only via the WTPA that such large penalties due to retaliation are incurred.

Wage violations would fall under the general umbrella of the State’s Department of Labor (DOL) but the WTPA, passed in April 2011, created a larger system of penalties for employers. The WTPA quadrupled employer penalties for wage violations, and has added protection for employees who receive unfair treatment for addressing these unfair practices. Retaliation by employers, such as termination or threats that employees keep quiet, can award up to $10,000 to workers per instance of retaliation. In Veranda’s case, the two employees who brought the wage violations to the attention of Make the Road New York, an advocacy group that works with NY-area immigrants, were fired shortly after reporting the violations. Make the Road is one of the groups responsible for the passage of the WTPA; it first received notice of these violations last April, shortly before the WTPA became law.

In NY State, the minimum wage is $7.25/hour, with anything over 40 hours a week paid at 1.5 times this hourly rate. Veranda reportedly underpaid 25 employees, most of them immigrants, in addition to firing the two whistle-blowers to Make the Road NY. As well, tips that were designated for employees were distributed to management, instead. The restaurant, retail and construction industries often employ large numbers of immigrant workers – in the greater NYC areas and throughout the nation - and wage violations in these industries are particularly rampant because these workers are often unaware of their rights or afraid to rock the boat. NY Attorney General Eric T. Schneiderman, on behalf of Veranda’s wage violations, said that many minimum-wage earners are especially afraid of standing up for themselves, or voicing concerns about potential wage theft, when the economy is such that having a job is better than not having one at all; it’s better to accept a job that doesn’t pay in adherence to state guidelines than to complain about one and face the possible repercussions.

Veranda’s settlement, under the WTPA’s guidelines, forbids retaliated employees or those who were underpaid and now being duly-compensated, from future retaliation by the restaurant’s owners. As well, Veranda’s operations and wage practices will be monitored by the State for the next two years.